Rival doughnut shops set to throw hat in ring

Big Apple Donuts & Coffee opened its fourth outlet in Phnom Penh yesterday, staking claim to the capital’s Tuol Kork district and fortifying its market position against a barrage of recently opened independent doughnut shops and the imminent arrival of US giant Krispy Kreme.

Kimsong Chea, executive director of Big Apple Donuts & Coffee (Cambodia), said the Malaysian-based chain has expanded quickly since opening its first store in Cambodia in January 2015.

“We see the potential in the market, especially amongst youngsters who really like brands from overseas – they like our doughnuts a lot,” Chea said. “We are trying to open more outlets to reach more customers and make it more convenient.”

Big Apple’s rapid expansion has given it a sizeable chunk of the local specialty doughnut market, but a wave of new players – including Kesor and Donut Factory – have entered the market in recent months.

Yet its biggest battle could lie ahead, as US doughnut heavyweight Krispy Kreme – with nearly 80 years of experience and 1,000 outlets worldwide – prepares to open its first store in Cambodia by June.

Chea, however, said his brand’s followers would not easily be swayed as Big Apple’s creations – some topped with unconventional ingredients such as taro and cheese – have resonated with local customers.

“Our doughnuts mainly focus on Asian tastes, while [Krispy Kreme] originates in the US and is geared more toward Western tastes,” he said. “We have our own recipe and technique of making doughnuts, and we believe in our own quality.”

Express Food Group (EFG), a Cambodian subsidiary of Bangkok-based RMA group, secured the franchise licence for Krispy Kreme in Cambodia and has announced plans to open 10 shops here over the next five years.

The company, which also operates US dessert chains Swensen’s and Dairy Queen, inked the agreement “to fill the gap in a market where the consumption per capita has a lot of space to grow”, according to Martin Leclercq, operations manager for Krispy Kreme Cambodia.

While Krispy Kreme’s simple yet indulgent doughnut creations are firmly geared toward American tastes, Leclercq is confident that they will be well-received in Cambodia, just as they are in the other 24 world markets where the franchise now operates.

Moreover, the brand’s iconic “Doughnut Theatre”, which allows customers to see the doughnut creation process in action, is a consistent crowd-pleaser and point of distinction.

“Our customers worldwide say that Krispy Kreme stores are a ‘fun place’ for after work, before going home, or anytime throughout the day,” Leclercq said. “Krispy Kreme is accelerating its global footprint as it progresses in building a strong brand presence in the Asia Pacific [region].”

The competition promises to heat up. Krispy Kreme’s first store will open on Street 51 in the capital’s Boueng Keng Kang 1 neighbourhood – less than 50 metres from Big Apple’s flagship store and flanking the city’s longest-running doughnut shop, USA Donut.

David Nget, a business partner for USA Donut, which has been serving up American-style doughnuts in Phnom Penh since 1994, said he expects the new entrants to put a dent in his business – though he is not sure about their staying power.

While he anticipates Cambodians will rush to try Krispy Kreme, he is sceptical over whether the brand can maintain that momentum.

“I think that Krispy Kreme will be successful in the beginning because it is a new thing and Cambodians love new things,” he said. “A lot of businesses come and in the beginning they are successful, but in six or seven months they die down.”

Nget, who previously lived in California, where Cambodians dominate the mom-and-pop doughnut shop market, explained that while coffee and doughnuts are an integral part of American breakfast culture, the trend was unlikely to ever catch on in Cambodia. Even after 20 years in business, his clientele is mainly foreign NGO workers and US Embassy employees.

However, Mao Vibol, managing director of Pheapbol’s BrewHouse Coffee, Donuts, Bakery and Ice Cream, argued that while Cambodians have different tastes and habits from Westerners, doughnuts are increasingly taking hold in the Kingdom.

However, to attract customers his local chain – an offshoot of US-based Donut City – rebranded to position itself as a full-service cafe with a broader menu. Doughnuts alone just didn’t cut it.

“We need to do a lot of promotions here because doughnuts are not the breakfast choice, it’s a dessert that [Cambodians] always eat with tea or coffee,” Vibol said.

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